ECONOMICS | |||||
Bachelor | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF-LLL: Level 6 |
Course Code | Course Name | Semester | Theoretical | Practical | Credit | ECTS |
ECO2064 | Dynamic Economic Models and Differential Equations | Spring | 3 | 0 | 3 | 6 |
This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester. |
Language of instruction: | English |
Type of course: | Departmental Elective |
Course Level: | Bachelor’s Degree (First Cycle) |
Mode of Delivery: | Hybrid |
Course Coordinator : | Assoc. Prof. KAAN İRFAN ÖĞÜT |
Course Lecturer(s): |
Assoc. Prof. KAAN İRFAN ÖĞÜT |
Recommended Optional Program Components: | None |
Course Objectives: | This course provides students mathematical tools that are useful in analyzing dynamic economic models like Mundell – Fleming, Tobin – Blanchard or Dornbusch Models with system of differential equations and phase planes. This course also provides an introduction to the theory of nonlinear dynamics and chaos in nonlinear differential and difference equation systems. |
The students who have succeeded in this course; 1- Understand dynamic processes in economics and concepts of dynamic economics. 2- Solve differential equations and equation systems. 3- Analyze stability of dynamic systems on phase diagrams 4- Use Excel to calculate values and to sketch the graph of dynamic variables. 5- Establish dynamic macroeconomic models. 6- Use mathematical methods to analyze dynamic macroeconomic models 7- Simulate the macroeconomic models with Vensim software. |
I. Continuous Systems of Equations: Solutions to the Differential Equation System The Phase Plane, Fixed Points and Stability II. Discrete Systems of Equations Solutions to the Difference Equation System III. Closed Economy Dynamics IS – LM Model Tobin – Blanchard Model The Dynamics of Inflation and Unemployment IV. Open Economy Dynamics Sticky Price Models Mundell – Fleming Model Mundell – Fleming Model: Fiscal and Monetary Expansion Under Fixed Exchange Rates Mundell – Fleming Model: Fiscal and Monetary Expansion Under Flexible Exchange Rates V. Open Economy Dynamics Flexible Price Models Dornbusch Model and Overshooting Dornbusch – Blanchard Model |
Week | Subject | Related Preparation |
1) | Systems of First Order Differential Equations. Solutions to the Differential Equation System, The Phase Plane, Fixed Points and Stability | |
2) | Systems of First Order Differential Equations:The Phillips Inflation – Unemployment Model | |
3) | Discrete Systems of Equations Solutions to the Difference Equation System | |
4) | Closed Economy Dynamics. Dynamic IS – LM Model | |
5) | Closed Economy Dynamics with Linearization of Nonlinear Differential Equation System Tobin – Blanchard Model | |
6) | The Dynamics of Inflation and Unemployment Two Simple Models of Inflation Deflationary Death Spirals Money Growth and Inflation | |
7) | Open Economy Dynamics Sticky Price Models Mundell – Fleming Model: Fiscal and Monetary Expansion Under Fixed Exchange Rates | |
8) | Open Economy Dynamics Sticky Price Models Mundell – Fleming Model: Fiscal and Monetary Expansion Under Flexible Exchange Rates | |
9) | Midterm Exam | |
10) | Open Economy Dynamics Flexible Price Models Dornbusch (Daniel) Model and Overshooting | |
11) | Open Economy Dynamics Flexible Price Models Modified Dornbusch Model Dornbusch - Blanchard Model | |
12) | New Growth Theory R&D Modes Learning by Doing Model | |
13) | Calculus of Variation Inflation – Unemployment Model | |
14) | Dynamic Optimization and Optimal Control Theory Neoclassical Growth Theory | |
15) | Nonlinear Dynamics and Introduction to Chaos Kaldor’s non-linear cyclical model Population Models Goodwin’s Growth Model | |
16) | Final Exam |
Course Notes / Textbooks: | Economic Dynamics, Ronald Shone, Cambridge University Press, 2002 |
References: | . |
Semester Requirements | Number of Activities | Level of Contribution |
Quizzes | 3 | % 30 |
Project | 1 | % 25 |
Final | 1 | % 45 |
Total | % 100 | |
PERCENTAGE OF SEMESTER WORK | % 30 | |
PERCENTAGE OF FINAL WORK | % 70 | |
Total | % 100 |
Activities | Number of Activities | Duration (Hours) | Workload |
Course Hours | 16 | 3 | 48 |
Quizzes | 3 | 5 | 15 |
Midterms | 1 | 12 | 12 |
Final | 1 | 25 | 25 |
Total Workload | 100 |
No Effect | 1 Lowest | 2 Low | 3 Average | 4 High | 5 Highest |
Program Outcomes | Level of Contribution | |
1) | As a world citizen, she is aware of global economic, political, social and ecological developments and trends. | 1 |
2) | He/she is equipped to closely follow the technological progress required by global and local dynamics and to continue learning. | 1 |
3) | Absorbs basic economic principles and analysis methods and uses them to evaluate daily events. | 4 |
4) | Uses quantitative and statistical tools to identify economic problems, analyze them, and share their findings with relevant stakeholders. | 5 |
5) | Understands the decision-making stages of economic units under existing constraints and incentives, examines the interactions and possible future effects of these decisions. | 5 |
6) | Comprehends new ways of doing business using digital technologies. and new market structures. | 5 |
7) | Takes critical approach to economic and social problems and develops analytical solutions. | 5 |
8) | Has the necessary mathematical equipment to produce analytical solutions and use quantitative research methods. | 5 |
9) | In the works he/she contributes, observes individual and social welfare together and with an ethical perspective. | 1 |
10) | Deals with economic problems with an interdisciplinary approach and seeks solutions by making use of different disciplines. | 4 |
11) | Generates original and innovative ideas in the works she/he contributes as part of a team. | 1 |